Unfortunately, it hasn’t worked out so well. My returns to date are below 2%.

This isn’t because I invested in riskier loans. LendingClub predicted that, based on the automated investing approach I had, I’d see returns of 5.5%-8.3%.

Of course, I started investing before news came out the LendingClub was up to shenanigans. But here are a couple of other things I learned along the way:

1. The house always wins. I originally looked at LendingClub from an investor’s point of view only. I didn’t bother to look at how it works for borrowers. I should have paid more attention to this. It turns out that borrowers pay an origination fee when they get a loan. For a while this was 5% off the top on all but the best loans; now it is 1.00%-6.00% depending on the borrower.

So if the origination fee on a loan is 5% and the person borrowers $10,000, they end up only getting $9,500 and LendingClub gets $500 before a single loan payment is made. See the conflict of interest here? It’s in LC’s best interest to originate as many loans as it can, even if they won’t be repaid. They win even if investors lose on any given loan.

2. There’s a lot of fraud. I know that LendingClub and its peers have taken steps to address this lately. But when someone takes out a loan and doesn’t make more than one payment, something is fishy. It turns out lots of people were taking out loans on multiple platforms at the same time. I also question how much work goes into verifying borrowers’ data.

Another thing to keep in mind is that you’re making loans with 3-5 year maturities. If marketplace lending like LendingClub starts to tank and delinquencies go up, you’re kind of stuck. There’s a marketplace for selling loans but it’s not as liquid as you might hope.

I’ve shifted my money that would go to LendingClub to PeerStreet. I feel more comfortable investing in loans that have something as collateral, and PeerStreet delivers that. You can also invest in shorter-term loans there.

History is littered with upended industries and business models. This sort of destruction will continue, and taking a look at what the future holds can present interesting investment theses.

Here’s what I think is on the horizon.

Transportation

A shift to self-driving cars will have monumental social implications and leave a number of battered industries in its wake.

There have been tremendous advances in car autonomy over the past five years, and it’s happening at an accelerating pace. The benefits of self-driving cars are simply too compelling for these efforts to peter out. There will be roadblocks, but the major commitment and money invested in efforts to see self-driving cars through to reality will overcome them.

Here are industries that will be majorly disrupted:

1. Fueling stations. There’s a good chance your self-driving car of the future will be electric. For many people, this means they have a fueling station inside their garage. It’s also possible that fueling stations will still exist outside the home, but they will be very different than they are now.

Whether they sell gasoline or electricity, don’t expect to personally visit them in the future. Cars will automatically visit fueling stations, refill, and then return to your home. Eventually, cars might even refuel wirelessly.

Location won’t matter as much, and there will certainly be no need for multiple fueling stations on valuable street corners.

Gas stations make a lot of their money from selling cigarettes, lottery tickets and booze. What happens when this foot traffic disappears?

2. Car manufacturers, dealers, and for-hire service. It remains to be seen if the leading technology companies working on autonomous cars partner with the existing large car manufacturers or compete with them. Either way, major upheaval is on its way.

That’s me with a Google Car in Austin.

If cars can drive themselves, does it make sense to own one? Why not just open an app on your phone and request a car, which shows up at your driveway within three minutes?

People are already ditching their cars to use services such as Uber, which is disrupting the taxi business. Soon, the people making money with Uber will find themselves without a job, too.

This is one reason Uber is investing in self-driving car research. Uber knows the days of operating a network of human drivers are limited. It will be easy to replicate its business model with self-driving cars, without the pain of recruiting and managing human drivers. GM just invested $500 million in Lyft, with much of the money earmarked for autonomous car efforts.

The biggest expense of your Uber ride is the driver’s time, and that expense is going to go to zero.

How low does the cost of traveling a mile in a for-hire car have to drop before it doesn’t make sense to own your own car? Or at least, that second car that doesn’t get driven much?

I wouldn’t be surprised if Google adopts an ad-funded model for its fleet of cars, charging customers nothing. This will help it skirt many of the regulatory challenges Uber is facing by operating a for-hire car network.

3. Insurance. Gone will be the days of shopping around for car insurance to find the insurer that doesn’t seem to mind that you have a bad driving history or credit score.

The current way insurance is rated will become irrelevant in the future. Assuming you actually own a car, car insurance might be provided by the manufacturer, bundled into a monthly service fee, or charged per mile traveled.

No matter how it is sold, the actual cost of insurance will plummet. Accidents between self-driving cars will be much, much less common than with human drivers. Accidents that do happen will be less severe.

4. Infrastructure. I live in Austin, and we have a major travel infrastructure problem here. The city is growing like a weed, but highway expansion lags. The same goes for most of Texas. Yet missing from the state’s long-range planning for infrastructure expansion is the reality of self-driving vehicles.

Simply put, capacity of existing roads will be much higher with autonomous vehicles. Self-driving cars won’t slow down to take a look at the stalled car on the other side of the highway. Nor will they needlessly tap the brakes, causing a chain reaction and delays. They can also travel much closer together because they’re in communication with the other vehicles on the road.

You know that feeling of getting to the end of a traffic slowdown and wondering what the heck caused it? Your children might never experience this.

It’s possible that infrastructure costs will increase at first because there won’t be an overnight change from human-driven to self-driven cars. Special HOV lanes for self-driving cars might come first.

But eventually, the need to massively expand roadways will end.

The Rise of Robots and Surveillance

Self-driving cars are robots, and they aren’t the only machines taking over functions previously handled by humans — or that were previously handled by machines at great cost. Click here to continue reading…

I’m frequently pitched investment opportunities, ranging from real estate to oil leases to restaurants. I’ve always invested out of my bank account but have been curious if I could invest through my tax-deferred requirement accounts.

The short answer is yes. These investments are possible, but probably not through the broker that holds your IRA.

I reached out to Kirk Chisholm, Principal of wealth management firm Innovative Advisory Group to learn more. I posed this scenario: I want to invest in a real estate deal for a new apartment complex in town. I want to invest through my IRA funds that are currently in an account with a major broker.

UpMoney: Will I have to move my funds to a new custodian?

Chisholm: The short answer is, probably. Although all qualified custodians are allowed to hold virtually any asset in their custody for IRAs, most of them do not. It is the custodian’s choice on what assets they allow their clients to hold at their firm. Most custodians have chosen to specialize in certain asset types, either traditional or alternative investments.

For example, if you ask the broker dealer that you buy and sell stocks through, to hold an apartment complex, they will probably look at you funny. Then they’ll say you can’t do that. What they really mean is that they won’t do that.

It’s hard to get decent returns on cash these days. Banks are paying you virtually no interest on your savings, and then turning around and lending it to others at a substantial markup.

What if you could remove the bank from the equation and lend money directly to people looking to borrow?

That’s the idea behind peer-to-peer lending, which is now often called marketplace lending.

I became fascinated with this business model nearly a decade ago when Prosper.com launched. The service was kind of like an eBay for loans. People would post their story and why they wanted to borrow money, and lenders could fund their loans.

Unfortunately, Texas residents like me weren’t able to fund loans on these marketplaces back then due to state regulations. Earlier this year Lending Club, a publicly traded competitor, opened its doors to Texas residents looking to make loans. I decided to take the plunge…but the model has changed a lot from the early years. [Read more…] about Make high interest loans with peer-to-peer lending